Date: 20000104
Docket: 98-726-UI; 98-106-CPP
BETWEEN:
FAMILY SERVICES PERTH-HURON,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Rip, J.T.C.C.
[1] Family Services Perth-Huron ("Agency"), a
non-profit charitable organization, appeals from a decision by
Revenue Canada pursuant to the Unemployment Insurance Act
and Employment Insurance Act ("Acts") and
a determination under the Canada Pension Plan that
Nicole Savage, a special service provider, was employed by
the Agency under a contract of service and therefore is
considered to have been in an employee-employer relationship with
the Agency for the period 11 September 1995 to 8 November 1997
("period"). Therefore, the Agency was informed that it
is liable for insurance premiums payable under the Acts on
the earnings paid to Ms. Savage during the period and for
payment of Canada Pension Plan contributions.
[2] The Agency is operated by a volunteer Board of Directors
to carry on a variety of social services in Perth County,
Ontario, including marriage counselling, credit and debt
management, in-home auspice services, senior citizens'
programs, respite services and services for children with
disabilities. The Agency is funded from several sources:
donations, fees for services and contractual agreements with
municipal, provincial and federal governments.
[3] The program in issue is the Special Services at Home
Program ("Program") of the Ontario Ministry of
Community and Social Services within Perth County. The Agency
refers people requiring or desiring the services available under
the Program, or under private contract, to what is referred to as
a service provider ("provider"). The Agency provides
two types of services under the Program: support services and
respite services, and frequently a combination of the two.
[4] In the appeals at bar support services under the Program
are provided at home to children who may have developmental or
physical handicaps or require specific services. These services
include behaviour management, speech therapy, occupational
therapy, life skills and training. The family sets the goals it
wishes to achieve for the child but there is latitude for the
family and the provider to adjust the goals. Family members work
with the child and the provider to reach the goals.
[5] Respite services under the Program permit a caregiver an
opportunity to take time off from caring for a person. This
includes day care. The provider will attend at the home of the
client to permit the caregiver time off.
[6] There is a contract between the Agency and the provider
for support services and another contract for respite services. A
provider may render services to more than one client. A provider
may offer his or her services elsewhere as well. (Details of the
contract between the Agency and a provider are described later on
in these reasons.)
[7] Alan MacIntyre, the Agency's Executive Director,
testified that the Agency employs 3½ persons who are
designated co-ordinators of special services at home and are
responsible for the family accepting the Program's
services.[1] The
co-ordinators are qualified in developmental services and all
have a Bachelor's degree. There are about 180 families
(sometimes referred to as a "client") in the Program
that is carried on by the Agency. The workload is divided amongst
the co-ordinators who are responsible for matching each family
with a provider. There is also a supervisor of co-ordinators who
is also an employee of the Agency.
[8] Potential providers apply for the position directly to the
Agency. The Agency advises Human Resources Canada of any vacancy
and also advertises in newspapers for providers. It also relies
on word of mouth. Résumés are vetted and a police
check is made for each applicant. The Agency also interviews each
applicant.
[9] The Agency does not engage a provider's services
immediately. Once an applicant is accepted by the Agency, the
provider's name is placed on a list maintained by the Agency
for the purpose of providing services on a case by case basis to
approved clients. There are usually about 75 to 100 people on
this list, of whom ten are volunteers. While the provider is on
the list maintained by the Agency, the provider receives no
compensation from the appellant. Only after the provider and the
family agree to work together is a contract entered into between
the Agency and the provider; the contract is usually for a six
month term but can be renewed.
[10] A family applies for assistance to the Agency. The Agency
arranges a meeting between the family and a provider. A
co-ordinator also attends the meeting. If the family does not
like the provider, or if the provider does not want to work with
a particular family, another meeting is arranged for the family
and another provider.
[11] A psychologist or social worker prepares a program for
the client that is to be followed by the provider in servicing
the client. Both the family and the provider must agree to work
together. They jointly arrange for the hours the provider will
provide his or her services. There has to be a good rapport
between the client and the provider, said Mr. MacIntyre.
[12] A support contract[2] under the Program entered into between the appellant
and the provider sets out the name of the client who will receive
the support services as well as the number of hours per week the
services will be provided and the rate per hour. The contract
specifies that the time periods that services are to be provided
are to be established between the parent of the child, the
provider and the co-ordinator.
[13] The Agency enters into an agreement with the family of
the client who seeks aid. "Private purchase contracts"
are completed by the client's family and the Agency. The
parent agrees to purchase services from the Agency for their
child during a fixed period of time and agrees to pay the Agency
a fixed sum per hour plus training costs and transportation
costs. There is no payment from the client or his or her family
to the provider.
[14] A contract between the Ministry of Community and Social
Services and the Agency for similar services authorizes the
Agency to provide the service to a specific person and the Agency
is paid a fixed amount per hour.
[15] The Agency offers the provider a basic training program.
Notwithstanding any qualification the provider has obtained
elsewhere, the Agency wants to ensure he or she is properly
trained for the work he or she will undertake under the Program.
The Agency also provides training for specific needs of a child.
For example, the Agency will train a provider how to serve a
child with cerebral palsy. In the latter case, the provider is
expected to attend at a medical practitioner's office with
the family and patient.
[16] The provider is to maintain time sheets and travel
expense sheets. These documents are signed by the client and
submitted to the appellant on the first day of each month. The
time sheet sets out the name of the client, the type of service
provided, the day of the week the provider was at a particular
client's and the number of hours the provider was at the
client's home. The provider is not paid until the time sheet
is approved by the Agency. This applies to both service and
respite providers.
[17] A provider is entitled to a travelling allowance if the
provider used his or her vehicle more than 20 kilometres in a
given day. Any travel is recorded on the travel expense sheet.
The 20 kilometres is calculated on the basis that the provider
would travel 20 kilometres to and from the provider's home
and the client's home. The allowance is for mileage incurred
by the provider for outings while at the client's home and
for mileage when travelling from one client's home to another
client's home. In the appeal at bar, Ms. Savage owned her own
automobile and was responsible for insurance and licencing of the
vehicle together with all operating costs.
[18] A service provider is responsible for implementing the
programs prepared by the Agency, keeping program records and
submitting progress reports to the Agency. The provider is also
to report to the special services co-ordinator as assigned. The
special services co-ordinator is responsible for supervising and
monitoring the program used. A job description is attached to the
contract. The job description of a support provider sets out the
responsibilities of the provider and the personal qualities
required. Responsibilities include:
- provide for the overall care and welfare of the client by
meeting all the standards and requirements of the program;
- meet regularly and review contract hours with co-ordinator
and/or Program Consultants as assigned;
- attend training sessions;
- accompany client/family to treatment assessment centres as
assigned;
- observe, participate and implement client's individual
therapies as assigned (e.g. physio, occupational, and speech
therapy);
- attend and participate in case conference;
- maintain accurate clinical records within parent relief
booklet;
- submit finished reports/clinical notes to co-ordinator
monthly;
- keep all relevant parties informed of client's
condition/progress both verbally and through written reports;
- ensure that medical information and medication forms,
assessments, consent forms, and client information forms on the
client are up-to-date for current parent relief period where
appropriate;
- administer and record documented medication if service
provider is over 18 years of age;
- understand the needs of the client;
- provide opportunities for stimulation and development;
- maintain a safe environment for the client;
- fulfil primary responsibility of providing in-home support
while doing appropriate light housekeeping duties in the absence
of client's caretaker (e.g. prepare simple meals);
- plan and/accompany client on leisure/recreation
activities;
- assist in development of resources for programing;
- encourage parents to carry through programs;
- inform co-ordinator of need for change in program for client
as necessary;
- inform co-ordinator immediately if any problems/concerns
arise.
[19] A provider is required to have good communication skills,
flexibility, willingness to learn, ability to function in an
independent working situation according to the job description. A
respite contract contains a similar, although not identical, job
description.
[20] Under a respite contract the provider provides services
to the client for a maximum number of hours per week or up to so
many days per a month at an hourly rate. If the provider works
over seven hours in any one day, that is considered a per
diem rate and the provider will be paid at a flat fee per
day. The services to be provided are established by the parents,
the provider and the co-ordinator.
[21] The respite contract also states the provider is not an
employee. The respite provider is responsible for the overall
care and welfare of the client, record keeping and reporting to
the special services co-ordinator. Again, the special service
co-ordinator is responsible for supervision and monitoring
of the program for the client. A similar job description, but not
identical to that attached to a service provider's contract,
is also attached to the contract for respite services.
[22] A provider is to consult with the co-ordinator before
going on any outings and any outing must be accounted for on a
program outline for the particular client.
[23] No services are provided by the provider at the
Agency's establishment, nor is there space available at the
Agency for the provider to work. The provider carries no
identification indicating that she or he works for the Agency.
The provider is not under the direction, control or supervision
of the Agency or any of its officials at the time the provider is
performing services with a client.
[24] The Agency may direct a provider to attend meetings and
conferences and the provider is paid for attendance. If a
provider is ill, he or she is not paid for time not working.
[25] A program that has been devised for a particular client
must be followed by the provider. Within the constraints of the
individual's program, the provider is responsible, and has
discretion, for providing the services for which the family
engaged the Agency. If a program does not appear to be
successful, the provider is to inform the Agency. The provider
plans and accompanies the client on leisure or recreational
activities and implements programs and individual training plans
or plans of care. It is the service provider who encourages
parents to carry through with suggested programs. The provider
and the client and his or her family determine how the services
will be provided, when they will be provided and how they will be
provided. However, the provider must provide the service within
the context of the contract he or she has with the Agency.
[26] Mr. MacIntyre and Ms. Susan Melkert, a
supervisor of the family support team at the Agency, agreed that
the Agency is required to monitor the services being undertaken
under the Program and ensure that the contractual
responsibilities of the Agency and the providers are fulfilled to
the satisfaction of the client and the family involved. However,
it is their view that such monitoring occurs as an oversight
function rather than as a daily control mechanism.
[27] From time to time co-ordinators may attend the homes of
the families who have secured the services to evaluate the type
of job the provider is performing and to ensure that the services
are being provided. The co-ordinator and the provider may also
meet regularly to discuss the progress of the clients. The
meetings may be weekly at first, then twice a month and,
thereafter, when the provider has proven himself or herself,
monthly or less frequently.
[28] The client's family and the co-ordinator prepare a
book (referred to at trial as a "yellow book") of
detailed instructions for the service provider. The book is
prepared from questions the co-ordinator has asked the
family and the answers given by members of the family. The
co-ordinator "co-ordinates" the information from the
family and other participants dealing with the child and is made
available as an aid to the provider. Ms. Melkert explained
that this is not a book of instructions given to the provider for
the purpose of monitoring, supervising or controlling the
day-to-day discretionary activities of the provider.
[29] A "green" jacketed file is also given to the
provider. This file describes the goals the family wish to
accomplish through the program designed by the Agency.
[30] The number of hours worked on any particular day or in
any particular week or month is dependent upon the hours the
provider has agreed with the family to work. A provider may
provide services to one or more clients and the amount of work
the provider will undertake is dependent on the number of clients
that provider wishes to serve and the Agency views as a
reasonable workload.
[31] If a provider, in the course of providing services to a
family, is of the view that the child for whom the services are
being performed lacks certain toys or equipment the provider has
to provide these toys and tools out of his or her own pocket. The
Agency does not provide any "tools" or
"equipment". If a child is to attend at the home of a
provider, the provider pays for food, bedding, and other
supplies, including a toilet training seat, out of his or her own
pocket without reimbursement by the Agency. Also, the provider
must ensure the house is safe and, toward this end, must place
all medicines under lock and have a fire extinguisher at
home.
[32] The Agency hired Ms. Savage to provide both support and
respite services. The services she provided to clients were
similar to services provided by other providers to clients in
similar circumstances.
[33] Ms. Savage first worked for the Agency as a volunteer.
During the period in issue she had approximately 15 to 20
contracts, each for a six month term, with different families.
During part of the time in issue, she also worked part-time
as a customer services representative at the Stratford Festival.
Ms. Savage was in her final year at Sir Wilfrid Laurier
University, studying psychology, in 1995. One of the courses Ms.
Savage studied was entitled "Children with
Disabilities". She acknowledges that the university courses
helped her in her job. Ms. Savage had only had two respite
clients at home where she resided with her parents. She
acknowledged that she did not have much training as a respite
provider. The Agency informed Ms. Savage on fire precautions
and procedures and how to give a child medication. She stated she
attended therapy with a child but did not purchase any toys or
equipment. She was also paid for attending the meetings with the
Agency.
[34] The principles that a court should consider in
determining whether persons are in an employer-employee
relationship are set out in the Federal Court of Appeal decision
of Wiebe Door Services Ltd. v. Canada.[3] In Wiebe Door, MacGuigan
J.A. adopted what he refers to as the "four-in-one
test" of Lord Wright in Montreal v. Montreal
Locomotive Works Ltd. et al.[4] Lord Wright combined and integrated the
traditional tests of (a) degree or absence of control by the
alleged employer, (b) ownership of tools, (c) chance of profit or
risk of loss and (d) integration of the worker's work to the
employer's business in order to seek out the meaning of the
transaction between an employer and a worker.[5] It is "the combined force
of the whole scheme of operations" that must be emphasized
even while acknowledging the usefulness of the four traditional
tests.
[35] One must search for the essence of a relationship between
an employer and a worker. MacGuigan J.A. describes
Professor P.S. Atiyah's[6] counsel to be of great value:
[I]t is exceedingly doubtful whether the search for a formula
in the nature of a single test for identifying a contract of
service any longer serves a useful purpose. ... The most that can
profitably be done is to examine all the possible factors which
have been referred to in these cases as bearing on the nature of
the relationship between the parties concerned. Clearly not all
of these factors will be relevant in all cases, or have the same
weight in all cases. Equally clearly no magic formula can be
propounded for determining which factors should, in any given
case, be treated as the determining ones. The plain fact is that
in a large number of cases the court can only perform a balancing
operation, weighing up the factors which point in one direction
and balancing them against those pointing in the opposite
direction. In the nature of things it is not to be expected that
this operation can be performed with scientific accuracy.
This line of approach appears to be in keeping with what
Lord Wright said in the little-known Privy Council decision
in Montreal Locomotive Works ...
[36] MacGuigan J.A. found the best synthesis in the words of
Cooke J. :[7]
The observations of Lord Wright, of Denning L.J., and of the
judges of the Supreme Court in the U.S.A. suggest that the
fundamental test to be applied is this: "Is the person who
has engaged himself to perform these services performing them as
a person in business on his own account?" If the answer to
that question is "yes", then the contract is a contract
for services. If the answer is "no" then the contract
is a contract of service. No exhaustive list has been compiled
and perhaps no exhaustive list can be compiled of considerations
which are relevant in determining that question, nor can strict
rules be laid down as to the relative weight which the various
considerations should carry in particular cases. The most that
can be said is that control will no doubt always have to be
considered although it can no longer be regarded as the sole
determining factor; and that factors, which may be of importance,
are such matters as whether the man performing the services
provides his own equipment, whether he hires his own helpers,
what degree of financial risk be taken, what degree of
responsibility for investment and management he has, and whether
and how far he has an opportunity of profiting from sound
management in the performance of his task. The application of the
general test may be easier in a case where the person who engages
himself to perform the services does so in the course of an
already established business of his own; but this factor is not
decisive, and a person who engages himself to perform services
for another may well be an independent contractor even though he
has not entered into the contract in the course of an existing
business carried on by him.
[37] When considering an appeal of this nature there will be
factors that favour an employer-employee relationship and those
that suggest the worker is an independent contractor. The trial
judge, the authorities say, is to consider all of the factors
together – one factor not necessarily being more important
than another factor – and from his or her appreciation of,
or reaction to, the relevant factors or tests, make a decision.
The trial judge should look at the forest, not the trees. It is
the sum of all relevant factors that determine the relationship
between the worker and the employer, not separate factors or
tests. There are cases, however, where in the same way one tree
may dominate a forest, a particular factor or test may dominate
and determine the nature of the relationship. This is not the
case in the appeals at bar.
[38] In the case at bar the weight of all the relevant factors
lead me to conclude that the relationship between the Agency and
Ms. Savage was not one of employer and employee: Ms. Savage was
an independent contractor.
[39] Any control the Agency exercised over Ms. Savage was
minimal. Ms. Savage was required to attend a training course
as well as periodic meetings. She was required to prepare reports
on the progress of the clients. She followed a program prepared
by the Agency to be used in serving the client. None of these
requirements, or the combined requirements of the Agency set
forth in the contracts with providers, culminate in a degree of
control that significantly colours the relationship between the
Agency and the providers. Evidence was led that Ms. Savage
had the ability to exercise her discretion, ability and judgment
when providing services to the children and their respective
families and to any reports she was required to write was for the
purpose of reporting progress of the client. Meetings with the
co-ordinator of services were to assist Ms. Savage in performing
her work, not in limiting her discretion.
[40] At the same time it was Ms. Savage and the client's
family who determined when she would work. Ms. Savage had the
freedom to accept or reject working with a particular family. The
job description attached to the contract with the Agency is just
that: a description of what is expected from a provider; it is
not a means of control. Similarly, progress reports submitted by
a provider ought not be construed as a means of control.
[41] The Agency had no tools and provided no facility in its
offices to the provider to perform any of his or her functions.
Any tools had to be obtained by the provider from his or her own
resources. The work was primarily done at the home of the
client.
[42] The provider's profit was determined by the number of
hours worked with a client and the number of clients a provider
wished to serve. The provider elected whether to diminish his or
her earnings by purchasing supplies and tools for the client. The
provider was not paid when, because of illness, for example, he
or she could not attend at the client's home. The provider
was paid only for the time he or she was contracted to work. And
it appears that if the provider is ill, the Agency cannot replace
him or her with another provider.
[43] The Agency carries on social services in the community.
Of course, without the provider it cannot provide services under
the government Program. The work performed by the providers forms
an integral part of the services the Agency is mandated to
perform. On the other hand, a person, after successfully
completing various courses, may obtain a skill which he or she
may use for profit. Nothing prevents the Agency from contracting
the services of these persons and, as Cooke J. stated, a person
like Ms. Savage who engages herself to perform services for
another, in the appeals at bar, the Agency, may well be an
independent contractor even though the provider may not carry on
an existing business.
[44] Ms. Savage was not engaged in insurable employment or
pensionable employment during the period in issue within the
meaning of the Acts and the Canada Pension Plan.
The appeals are allowed and the decisions of the Minister of
National Revenue under the Acts are vacated and the
Minister's determination under the Canada Pension Plan
is reversed.
Signed at Ottawa, Canada, this day of January 2000.
"Gerald J. Rip"
J.T.C.C.
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